Global Cement Newsletter

Issue: GCW613 / 21 June 2023

Headlines


Mining and materials company Afrimat said it was buying Lafarge South Africa this week. The assets it is acquiring include aggregate quarries, ready mix concrete (RMX) batching plants, one integrated cement plant, two cement grinding plants, cement terminals and fly-ash sources. The means of purchase is somewhat unusual, as Afrimat is paying around US$6m but it also appears to be taking responsibility for around US$50m of outstanding debt that Lafarge South Africa owes its parent company, Holcim. In a statement Afrimat’s chief executive officer (CEO) Andries van Heerden talked up the benefits for his company in terms of the boost to its aggregates and concrete businesses.

This is quite the change from 2012 when India-based Aditya Birla Group was reportedly looking into buying Lafarge South Africa. At this time the value for the business for a similar mix of assets, including 55 RMX plants and 20 quarries, was said to be to US$900m. Prior to this, Lafarge South Africa spent around US$170m in the late 2000s on increasing the production capacity at its integrated Lichtenburg plant and building its Randfontein grinding plant. Then in 2014, when the merger between Lafarge and Holcim was announced, Lafarge consolidated its Nigeria-based and South Africa-based operations as Lafarge Africa. It later decided to move the South African business to another Holcim subsidiary, Caricement, in 2019 to keep the business in Nigeria more profitable by reducing its debts. This transaction was valued at US$317m. At the time chair Mobolaji Balogun said that Lafarge South Africa’s operations had faced a challenging market in South Africa, with shrinking demand in an aggressively competitive sector. Afrimat is now buying Lafarge South Africa and its subsidiaries from Caricement.

Holcim isn’t alone in making an effort to sell up in South Africa. In April 2023 the Valor Econômico newspaper reported that Brazil-based InterCement was receiving offers for its remaining African-based assets in Mozambique and South Africa with a potential deal valued at around US$300m. InterCement runs Natal Portland Cement in South Africa, which operates one integrated plant and two grinding units. This follows the sale of its Egypt-based assets in January 2023 to an unnamed buyer.

PPC, the country’s largest cement producer, is staying put. However, it issued a mixed trading update this week ahead of the formal release of its annual results to 31 March 2023. Trading conditions in the interior of South Africa and Botswana were described as being ‘difficult,’ with cement sales volumes down by nearly 6% year-on-year and earnings before interest, taxation, depreciation and amortisation (EBITDA) down by 26%. Yet the group says it was able to grow its revenue. PPC’s CEO Roland van Wijnen added, “We therefore remain hopeful that the South African government will roll out its infrastructure development plans and protect the local cement market through the introduction of import tariffs to create a level playing field for domestic producers.” Dangote Cement subsidiary Sephaku Cement was more circumspect in its recent trading update but it too warned that, “deteriorating economic conditions and persistent challenges in the cement industry impacted Sephaku Cement’s financial performance to break-even levels.”

Much of the above makes for gloomy reading. As the local trade association Cement and Concrete South Africa (CCSA) has laid out to local media, the market faces the problem of having 20Mt/yr of production capacity, 12Mt/yr of demand and over 1Mt/yr of imports compounding the problem. Lobbying by local producers against imports has been a feature of the market since the early 2010s and this work continues through the efforts of the CCSA and others. However, the plea by PPC for government infrastructure spending suggests that the market faces more systemic problems. As a consequence some cement producers are trying to leave the market, while others are attempting to tough it out.


Belgium: Cembureau, the European Cement Association, has elected Ken McKnight as its president and Jon Morrish as vice-president. McKnight, a member of the CRH executive committee, succeeds Isidoro Miranda in the role. Morrish is the chief executive officer for Western & Southern Europe of Heidelberg Materials.


Germany: Schenck Process has appointed Jörg Ulrich as the chief executive officer (CEO) of its Schenck Process EMEA and Asia subsidiary. He succeeds Christoph Haar, who is leaving the company. Ulrich previously held the position of CEO at Linde Hydraulics for more than 10 years. He has also worked in the private equity sector most recently as the Chief Transformation Officer at TK Elevator.

The company’s EMEA and Asia division employs more than 1100 people on four continents and focuses on chemical and high-performance materials as well as infrastructure and energy market segments.


UK: British Rema has appointed Tony Goodwin as its Group Managing Director. He holds 30 years of experience in industrial powder processing and handling. He was previously the managing director of Oliver Valves. Prior to this he spent much of his career working for Kemutec and related companies, firstly in engineering roles and then in operations.

British Rema Group comprises three divisions: British Rema Process Equipment; British Rema Processing; and British Rema Rotary Engineering. The three companies provide powder processing equipment, contract processing and rotary engineering services to the mineral, chemical and recycling industries.


Ukraine: Buzzi has agreed to sell its business in Ukraine to Ireland-based CRH for US$109m. The assets additionally include Buzzi’s Slovakian ready-mix concrete business. The Ukrainian business is comprised of the 2Mt/yr Volyn cement plant and 1Mt/yr Nikolajev cement plants, as well as ready-mix concrete operations in Kiev, Nikolajev and Odessa.

Italy-based Buzzi retains its operations in Russia, including the 3.6Mt/yr Suchoi Log cement plant in Irkutsk Oblast and the 700,000t/yr Korkino cement plant in Chelyabinsk Oblast.


Saudi Arabia: Hoffmann Green Cement Technologies (HGCT) and property developer Shurfah Holding have signed a letter of intent to conclude a licensing agreement for use of HGCT’s technology by the state-owned construction firm. BusinessWire News has reported that HGCT plans to build four new units to produce its clinker-free alternative cement in Saudi Arabia. Construction will begin in 2024. Shurfah Holding said that the partnership signals progress towards the development of smart cities under the state’s Vision 2030 economic plan.

HGCT co-founders Julien Blanchard and David Hoffmann thanked Shurfah Holding and said that the partnership represents an acceleration in the producer’s international development.


Afghanistan: The government of Afghanistan claims that five new cement plants will imminently commence construction across five Afghan provinces. Acting Mines and Petroleum Minister Shahabuddin Delawar said that plants are planned in Herat, Jawzjan, Kandahar, Logar and Parwan Provinces. When operational, the plants should make Afghanistan self-sufficient in its cement supply.


Indonesia: Indocement Tunggal Prakarsa has engaged Japan-based environmental consultancy Amita Holdings to support a two-year feasibility study to investigate ways to make its cement production carbon neutral. The study will commence with trials of industrial wastes as alternative raw materials and municipal solid waste as refuse-derived fuel. Amita Holdings says that it is in the process of building a recycling-based society in Indonesia, in partnership with Indocement Tunggal Prakarsa.

Amita Holdings supported the establishment of the community-led Meguru waste sorting facility in Central Java. Two of Indocement Tunggal Prakarsa’s cement plants – the 18Mt/yr Citeureup cement plant and 4.1Mt/yr Paliman cement plant – are situated in neighbouring West Java.


Germany: Heidelberg Materials has celebrated the 150th anniversary of its founding with a ceremony under the slogan 150 Years of Progress. Throughout its existence to date, the company has grown from 35 employees in Heidelberg, Baden-Württemberg, to 51,000 employees across 50 countries.

CEO Dominik von Achten said “150 years of progress, innovation and expertise are both an incentive and an obligation to help shape a more sustainable future for generations to come.” He added “We also want to make this a tangible experience here in Heidelberg where our company is based. That is why today marks the start of our anniversary campaign New Meeting Points of Innovation for Heidelberg. In the coming weeks and months, meeting places will be created in the Heidelberg city area to encourage exchange and innovative discussions. For this purpose, we want to set up a total of 150 benches made of sustainable building materials, and plant trees.”


India: The Goods and Services Tax Council will review the current imposition of a 28% goods and services tax on cement on 11 July 2023. The Telegraph newspaper has reported that the council is expected to recommend a reduction in the tax rate to the 18% band. Parliament’s Group of Ministers on Rate Rationalisation will then consider the recommendation.


Germany: Aumund Group will be run by the Aumund Foundation, following the death of its owner Franz-Walter Aumund in February 2023. The Aumund Foundation, created in 2019, was originally set up to promote the group’s philanthropic concerns, particularly on education, vocational training and research.

Alex van Denderen, the chief financial officer of Aumund Group and Aumund Holding, said “The Aumund Group is led by managing directors who have grown with the company and whose primary focus is on proximity to customers. It pursues the values of quality and reliability which have increasingly become anchored in the Aumund brand over its hundred year history. The Aumund Foundation supports the principle of creating something lasting for others, and is committed to achieving a sustainable future for the next generation.”

The group supplies products and services for conveying, storage, loading and unloading of bulk materials, site service, maintenance, and freight forwarding. It covers process chains in the cement, lime, gypsum, mining, minerals, metallurgy, foundry, power, chemicals, fertiliser and foodstuffs industries, as well as in ports and terminals and alternative fuels. Its subsidiaries include Aumund Fördertechnik, Schade Lagertechnik, Samson Materials Handling, Tilemann Ketten & Komponenten, Aumund Group Field Service and Aumund Logistic.


Laos: Oudomxay Jiangge Cement held a ceremony to mark the start of cement sales from its 2Mt/yr Oudomxay cement plant in Namor District on 14 June 2023.

Asia News Network has reported that China-based Guizhou Jiangge Cement acquired outright ownership of Oudomxay Jiangge Cement in mid-2017.


Cambodia: Dongfang Junma Cement is building a US$95m cement plant at Pchaev, in Battambang Province's Rattanak Mondul District. Agence Kampuchea Presse has reported that Dongfang Junma Cement expects to employ 980 people at the plant.


India: Shree Cement has announced four planned capacity expansion projects that aim to increase its installed cement production capacity by 20% to 55.9Mt/yr. The Telegraph newspaper has reported that the producer expects to invest US$670 - 730m in the expansion. The investments will go towards the establishment of new facilities in Karnataka, Punjab, Uttar Pradesh and West Bengal. The West Bengal project consists of a grinding plant in Howrah or Purba Medinipur District. The new phase of expansion is part of Shree Cement's strategy to reach 80Mt/yr of cement production capacity by 2030.

Vice chair Prashant Bangur said “Given the robust demand for cement in the country and Shree Cement’s aspiration to grow further, we are looking at four more units once the present phase of expansion is over.”

Shree Cement is currently expanding its Guntur, Andhra Pradesh, and Nawalgarh, Rajasthan, cement plants and building its new 3Mt/yr Purulia grinding plant in West Bengal.


Europe: Heidelberg Materials Northern Europe has signed a collaboration agreement with Volvo Group for an investigation into the use of electric vehicles in loading and hauling. Under the agreement, Heidelberg Materials Northern Europe will implement a mix of its electric trucks and construction equipment machines in its operations. Land-based transport accounts for 6% of the producer's CO2 emissions. Through electrification, Heidelberg Materials Northern Europe expects to eliminate 200,000t/yr of CO2 emissions.

Heidelberg Materials CEO Dominik von Achten said “The partnership with Volvo is a lighthouse project in our industry and has the potential to significantly push the decarbonisation of our entire value chain in northern Europe. We look forward to working together to identify and implement state-of-the-art solutions for a fast climate transition in the construction sector."


India: Adani Group has reportedly entered discussions with five banks in a search to refinance US$3.8bn-worth of loans taken for its acquisition of Holcim India. The Economic Times newspaper has reported that the group aims to secure funding by mid-July 2023. Potential participants in the refinancing round reportedly include Malaysia and Taiwan-based banks, as well as existing lenders Barclays, Deutsche Bank and Standard Chartered.


Uzbekistan: China Energy and the government of Uzbekistan have set a resolution to inaugurate the upcoming 3Mt/yr Samarkand cement plant before the end of 2024. Within the same timeframe, China Energy will launch 400MW-worth of new solar power plants in Bukhara and Kashkadarya. The China-based utilities company will subsequently expand its solar power capacity in Uzbekistan to 1000GW.

Uzbekistan Daily News has reported that China Energy and the government committed to cooperating further on the development of a programme for the implementation of joint projects, including more new 'production plants' and renewable energy infrastructure.


Benin: Société Des Ciments du Bénin (SCB) plans to build a new grinding plant in the industrial zone of Sèmè-Kpodji in Ouémé Department. 24 Heures au Bénin News has reported that the new plant will create jobs for local people in the production of cement for the Benin market from imported clinker.


Afghanistan: Jabal Saraj Cement has more than tripled its production of cement at the Jabal al-Saraj cement plant to 70t/day from 20t/day. Salam Watandar Online News has reported that the company has asked the government to expand the Jabal al-Sarraj plant's capacity to 3500t/day, to better realise the potential of local raw materials and labour.


US: The government has awarded a US$3.24m grant to Washington State University (WSU) for its research towards the development of reduced-CO2 cements. The research is investigating new formulations, in combination with novel technologies aimed at eliminating CO2 emissions. WSU is one of 40 recipients of a funding pot worth US$135m.

Energy Secretary Jennifer Granholm said "America’s industrial sector serves as the engine of the US economy, producing many of the products we rely on every day, but it also produces a significant amount of the nation’s carbon emissions. These projects funded by President Biden’s Investing in American agenda will slash industrial emissions and accelerate next-generation technologies for a clean energy future that’s made in America.”


Malaysia: Saint-Gobain has signed a definitive agreement to acquire cement boards producer Hume Cemboard Industries. The France-based group said that the company will complement its existing lightweight product offering in Malaysia. Saint-Gobain expects to complete the deal before 1 October 2023.


US: Heidelberg Materials North America inaugurated its 2.4Mt/yr Mitchell cement plant in Indiana on 14 July 2023. The plant is equipped with a 3600 bag/hr rotary packer, and also boasts a 154,000t-capacity clinker storage dome. It will produce Heidelberg Materials North America's EcoCem Portland limestone cement (PLC), alongside other products. The producer said that the new plant will help to address US cement supply chain constraints amid a planned US$110bn infrastructure overhaul.

Heidelberg Materials North America president and chief executive officer Chris Ward said "The plant will reduce CO2 emissions per tonne of clinker by almost 30%, mainly through operating on natural gas. Our investment in the Mitchell facility helps us lower our carbon footprint, while serving the growing demand for more sustainable products in this key market.”


South Africa: PPC has advised investors that its full-year 2023 results will show a more-than-doubling of its headline loss per share from continuing operations. The group said that its cement sales volumes in South Africa and Botswana fell by 5.8% year-on-year, while volumes in Zimbabwe dropped by 16%. Its subsidiary Cimerwa increased its cement sales volumes during the year by 1%. Despite the local decline in volumes, PPC increased its revenues in South Africa and Botswana by 1.7%. South Africa and Botswana cement sales constituted 46% of group revenues, Zimbabwe cement sales 17% and Rwanda cement sales 15%.


US: Holcim US has announced plans for a 25MW solar power plant to serve 75% of the electricity needs of its Alpena cement plant in Michigan. The company says that the installation at the Alpena plant will be the largest in the US Midwest Region. Holcim US chose NorthStar Clean Energy to build the array, which it says will eliminate 25,000t/yr of CO2 emissions.

Other planned projects at the Alpena cement plant include an upgrade to the plant's dock in order to accommodate larger vessels and reduce the number of trips in its Great Lakes transport operations.

Holcim US' senior vice president, manufacturing, Michael Nixon said “As Holcim is showing in Alpena, the path to net-zero carbon emissions requires a blend of proactive solutions. Whether it’s using alternative fuels or implementing renewable energy from solar power, we are committed to reducing our reliance on fossil fuels — a goal that will benefit the environment as a whole and the Alpena community we have called home for more than 115 years.”


Kenya: Parliament's Finance and National Planning Committee has rejected a petition from the Kenya Association of Manufacturers (KAM) for the removal of the 10% customs duty on imports of clinker. Business Daily News has reported that KAM member Rai Cement said that the duty will force cement plants to shut due to high costs. The committee, however, concluded that the levy aims to encourage local manufacturing, promote exports and create jobs for Kenyans.

National Cement, which operates the 1.95Mt/yr Kajiado cement plant in Merrueshi-Mbirikani, opposed the KAM line by submitting its own petition for an increase in the clinker import duty to 25%.


India: Sanghi Industries suspended operations at it Sanghipuram cement plant in Gujarat from 13 June 2023, ahead of the landfall of Cyclone Biparjoy on 15 June 2023. EB News has reported that Sanghi Industries has established refuges for its workers and host community, and has prepared food and first aid deliveries, emergency transport and monitoring. The company said that it will restart operations when normal conditions resume and in compliance with the advice of the government.

Times Now News has reported that Cyclone Biparjoy killed two people and injured 22 on the coast of Gujarat. Extremely heavy rain is forecast for 17 June 2023 in Kachchh District, where the Sanghipuram cement plant is located.


Europe: The European cement industry association, Cembureau, has welcomed the enactment of the Nature Restoration Law, which aims to restore ecosystems through binding targets in line with the EU Biodiversity Strategy. The European Commission says that the law provides a framework to 'secure the things nature does for free, like cleaning our water and air, pollinating crops and protecting us from floods,' as well as to help limit climate change to +1.5°C.

In a joint statement with other extractive industry bodies, Cembureau told the EU that member states' national restoration plans should take into account industry efforts to plan and implement nature restoration, that member states should protect pioneer species in line with the Nature Directives Species Protection Guidelines' definition of temporary nature and that restoration efforts outside of designated Natura 2000 areas should be addressed on a case-by-case basis in recognition of sectoral specificities.


Europe/India: Finland-based Betolar has secured EU-wide and Indian patents for a new waste-based alternative concrete produced without cement and capable of storing energy. Betolar said that the material, which is already patented in Finland, is especially suited for use in renewable energy infrastructure, where it can provide a storage solution for dealing with short-term peaks. Chief commercial officer Ville Voipio said that the company will now seek to establish a partnership for commercialisation of its new alternative building material.

Betolar produces and markets the Geoprime additive used to produce cement-free concrete from supplementary cementitious materials, including ground granulated blast furnace slag (GGBFS), in regions that include India and the EU.


Chile: Cemento Polpaico plans to invest US$67m in expanding its operations, with a focus on its Cerro Blanco cement plant in Santiago. Work will include the construction of a solar power plant and the expansion of the plant's limestone quarry. Meanwhile, Cemento Polpaico will upgrade the plant's kiln to increase its alternative fuel (AF) substitution rate to 75% from 13%. The upgrade will increase the production line's clinker capacity by 13% and reduce its CO2 emissions by 20,000t/yr. Additionally, the producer will build a new 3000t cement silo.


Peru: Unacem and Grupo Calidra have received clearance from the National Institute for the Defense of Competition and Protection of Intellectual Property (Indecopi) to launch a joint venture in the lime sector. Carretera News has reported that the new company will establish a 600t/day lime plant, at an investment cost of US$40m. The partners expect to commission the plant in early-mid 2025. Unacem, which holds a 51% stake in the venture, has reported that it and Grupo Calidra will fund the growth from a combination of their own finances and bank loans.


Europe: Sustainability policy organisation ECOS says that the European Parliament must enact the recommended Sustainable Products Regulation. The parliament received the recommendation from its Environment, Public Health and Food Safety committee (ENVI). ECOS says that the regulation would submit cement to the EU's Ecodesign environmental impact framework.

Environmental Coalition on Standards (ECOS) programme manager Joren Verschaeve said “Members of the ENVI committee have voted to regulate one of the most polluting products on the market. The Ecodesign for Sustainable Products Regulation will provide the cement industry with a stable and predictable framework towards decarbonisation.”

ECOS founded the Alliance for Low-Carbon Cement & Concrete (ALCCC), an association of companies focused on alternative building materials production, in May 2023.


Guatemala: Switzerland-based Holcim has acquired mortars and adhesives producer Minerales y Agregados, Reuters has reported. Holcim described Guatemala as a 'high-growth market.'


Argentina: Holcim Argentina has commissioned its new 120,000t/yr mortar plant at its Malagueño cement plant in Córdoba. The plant cost US$5m to build. It is equipped with six 100t raw material silos and eight 1t additive silos. It also has a 2000l mixer, three packing machines and an automated palletiser. Holcim Argentina says that the plant will produce its Tector Adhesive and Tector Revoques ranges of mortar.

Holcim Argentina chief executive officer Christian Dedeu said “This new plant is aligned with our purpose of generating progress for people and the planet, accompanied by a diversification of our product portfolio. It consolidates us as the leading company in innovative solutions for construction.”